Italy Announces $6B Warship Deal with Qatar

Fincantieri faces tough negotiations ahead for the purchase of French naval and cruise ship yard STX France, but it has had recent success with foreign military sales: Italian Foreign Minister Angelino Alfano said Wednesday that the state-owned shipbuilder will deliver seven naval vessels for Qatar at a total price of about $6 billion.

The announcement bears similarity to another from June 2016, when Fincantieri CEO Giuseppe Bono signed an agreement to build seven vessels for Qatar's navy, including an amphibious landing dock ship, two patrol vessels and four corvettes, at a similar package price. In his comments Wednesday, Minister Alfano did not say whether the terms of this previous deal had changed.

Alfano made the new announcement Wednesday during a visit to Doha, and he used the opportunity to express Italy's diplomatic support for Qatar. "I would like to point out to our excellent ties with Qatar and that our goal is to support Qatar’s plans in the international arena," he said.

Qatar has been under a trade embargo imposed by a Saudi-led coalition for nearly two months. The UAE, Saudi Arabia, Egypt and Bahrain closed off shipping and aviation to and from Qatar on June 5, alleging that Doha is engaged in supporting terrorism. Qatar denies the allegation and has pointed to coalition members' own ties to terrorist groups like Islamic State.

The ban has created uncertainty for vessel operators, and it forced container carriers to reroute Doha-bound consignments. Iran and Turkey stepped up food shipments to Qatar in order to offset the immediate effects of the embargo, and Qatar Airways is flying in hundreds of milk cows to counter a shortage of dairy products. Qatar has filed a complaint against Saudi Arabia, the UAE and Bahrain with the WTO, alleging that the blockade goes against the organization's "core laws and conventions on trade of goods and services."

Efforts to resolve the dispute continue. Among other international mediators, U.S. Secretary of State Rex Tillerson has attempted to convince the five nations involved to find a negotiated solution. All are U.S. allies, and most are home to American military bases – like Naval Support Activity Bahrain, home of 5th Fleet, and Al-Udeid Air Base in Qatar, the main hub for Air Force missions against the Islamic State. On Wednesday, Tillerson said that he has dispatched deputy assistant secretary Tim Lenderking and former special envoy Gen. Anthony Zinni (ret'd.) to "maintain constant pressure on the ground."